Hello,
This is a proposal to launch a USD stablecoin with the protocol, leveraging the same technology as what was built for EURA.
Context
Angle has been since its launch focused on the Euro. The technology we have developed on the Euro can work for any type of asset, and so while we had discussions last year to do it on the gold, we suggest to start our expansion with a USD stablecoin: USDA.
Idea is that this USD stablecoin should come with a savings solution, stUSD, that earns a portion of the yield generated by the protocol on its assets, and we’ll work towards offering deep Forex markets between USDA and EURA so anyone trading between a EUR stablecoin to a USD stablecoin (and conversely) will be able to do so using Angle upcoming Forex infrastructure.
We have worked over the past few months on setting up an asset liability management committee to ensure an institutional grade reserve management behind USDA and enable it to combine the best of DeFi in terms of possibilities (crosschain, leverage, yield, liquidity) with a solid and reliable risk framework to sustain adverse market conditions.
For more details on how the stablecoin should look like, please refer to the introduction article we have published.
Proposal
The proposal here is to use some of the equity behind EURA to bootstrap the USD stablecoin.
The setup we suggest here is one where all Angle stablecoins are fully independent of one another, with notably isolated reserves, and a separate allocation for the funds of the DAO for other day to day operations.
The equity backstop of USDA will be independent from the one of EURA, and made up of USD denominated assets, while the backstop of EURA will be made up of EUR denominated assets.
For every stablecoin, we have deployed a reserve multisig on Ethereum meant to hold the equity backstop of each stablecoin (addresses in the dev docs).
These are 2/3 multisig with the same signers as the guardian address of the protocol. After the deployment and setup of USDA, we’ll increase the thresholds for these ones for these to be 4/6 multisig.
For the details of the equity of the protocol and the composition of the DAO treasury, you can check this page of our analytics.
In details, here we propose to:
- take 3m€ worth of EURC from the governor address of the protocol along with the USDC held by the protocol on its governor and guardian addresses of the protocol across different chains and transfer them to the reserve multisig on Ethereum for USDA
- transfer the EURA, EURC, bC3M held by the protocol on the reserve multisig for EURA
Implementation
Once these transfers are done, 3m€ worth of EURC will be converted into USDC.
A portion of the USDC will then be converted into a mix of:
- bIB01 by Backed (25%)
- steakUSDC (the Metamorpho vault maintained by Steakhouse) (60%)
These are meant to be the first collateral assets of the Transmuter implementation for USDA. We’ll then use these assets to mint USDA to seed the Transmuter for USDA and deposit the minted USDA on the reserve multisig behind USDA.
We’ll share a proposal very soon on the initial launch parameters and setup for the USDA Transmuter.
Value to the protocol and risks
This reduces the equity backstop behind EURA. Currently the equity to liability ratio for EURA is at 33%, and this proposal should reduce it to ~15%, which is still far above all the other stablecoins in the market.
This initial seeding procedure will pave the way for a healthy growth of the USDA stablecoin. With this, the protocol will be able from day 1 to launch its savings solution and offer a yield to stUSD holders.
Note that so far, the DAO does not have ownership of the USDA smart contracts. We will slowly roll out most of the features behind USDA and post a vote for veANGLE holders to take ownership of the smart contracts associated to the stablecoin.
If this proposal is successfully voted, we will launch a first phase of private beta for the stablecoin before the full release.